Ethereum rallies as traders bet midterm loss pushes Trump toward Iran exit

Ethereum swung violently in the previous session, with the Democratic victory in both the House and the Senate initially dragging the cryptocurrency lower before it recovered strongly.

Traders appear to believe the midterm defeat will push Trump toward seeking an exit from the Iran war, a move that would eventually support economic growth as energy prices fall sharply.

Oil prices delivered the same signal yesterday, declining quickly after Vice President Vance pointed to the Iran conflict as the reason for the Republican Party's heavy midterm losses. A post from Vance on X strengthened the market's conviction that the Trump administration might pursue an off-ramp from the war instead of escalating military operations.

Still, Trump can legally keep military operations against Iran underway even with Democrats controlling both the House and the Senate. That means forcing an end to the war is not straightforward when he has nothing to lose. For now, though, this is the scenario the market is selecting.

Going forward, US-Iran negotiations will stay at the center of attention. A breakthrough would be bullish for Ethereum by improving the growth outlook and boosting risk sentiment. An escalation, by contrast, would likely lead to another selloff as growth concerns intensify and capital flows toward safe havens.

ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, Ethereum has broken through the descending trendline, opening the door to further highs. The breakout could extend the advance toward 2,575. If price reaches that zone, sellers may step in with risk defined above it, positioning for a decline toward 1,900. Buyers, on the other hand, want a move to fresh highs to build bullish exposure toward the 3,400 resistance, with 2,800 the first target.

ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, an ascending trendline could act as support if the price pulls back. Should price reach that line, buyers are expected to defend it, with risk defined below, while continuing to target new highs. Sellers, meanwhile, will be watching for a downside break to add bearish bets with 1,900 as the next objective.

ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, the consolidation has formed a possible bullish pennant. Buyers will be looking for a breakout to the upside to increase long positions targeting 2,575, while sellers will be looking for a break to the downside to position for a pullback to the broken trendline. The red lines mark today's average daily range.

UPCOMING CATALYSTS

The latest US Jobless Claims figures are due today. Tomorrow brings the week's final data, with the US NFP report and the University of Michigan Consumer sentiment survey.